In the late 1990's and up to 2003 I was trading with a group we called "No Brain University". The compelling idea was that we just did technical analysis of price and left our thinking brains "at the door". Since there was and had been so much dopey market thinking , bullish and bearish, in that era, 'No Brain' made a lot of sense to us.
One of the favored approaches in that period of great volatility was to use Andrews' pitchforks to identify the median line (as Andrews called it) or "bisect" line where a previous range was drawn through from its own prior price extreme. The concept is easier to show graphically than to describe in words. See below.
I was and am very interested in market sentiment as well as chart analysis, so at some point after 2000 I looked for a way to combine pitchforks/bisects with sentiment. I own(ed) Richard Russell's big NYSE A/D Line book from the late 1920's. I learned from that large book that the all-time high in the daily NYSE Advance/Decline line was in 1965 and the all-time low was in 1982. As a fun study I thought it would be interesting to use the 1965/66 high and 1982 low on a logarithmic as the range to be bisected from the 1932 Dow Jones low.
I was amazed to find that the upper boundary of a standard Andrews pitchfork with those three points was where the January 2000 Dow 30 price peak hit. Looking back from that point, the median or bisect line had constrained price from 1987 to 1994 after which price had raced up to the upper boundary.
Then the 2002-2003 lows showed up at the median/bisect! All I got were yawns when I posted the chart widely on internet chat sites in early 2003 as the Iraq war pressure was building and market sentiment was almost as bad as it is now.
I had forgotten about this chart for a year or more recently due to loss of older data bases and an old version of Meta Stock which went bye-bye due to a Windows XP "upgrade". But look how the rise from 2003 to 2007 topped out near the 3/4 range line which was support for the lows of 1997 and 1998.
Then the crash, or drop, from October 2007 to March came very close to the median line as it did in 2003. And market sentiment is quite similar today.
Approximately Dow 11100 is very important to this whole concept. A monthly close under 11000, or two closes, would pretty much seal it for the bears down to ~8300 or even ~5750. If the bears can't break it down then we are headed back up to far greater new highs. Or so the theory of Andrews and later interpreters goes. So far, so good.
Keep in mind that the Andrews logarithmic median/bisect line represents a percent per period increase in price of the Dow 30 since the 1932 bear market low at 41! So a breakdown would carry some weight.
In case the chart here does not show well for any of many possible reasons, this URL may work better:
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